Last Year, Dollar and Euro Export Payment Shares Increased... Won Share Decreased

[Image source=Yonhap News]

[Asia Economy Reporter Eunbyeol Kim] Last year, the proportion of export payments received in US dollars and euros increased, while the share of payments in Korean won decreased.

According to the '2020 Mid-Year Export and Import Payment Currency Statistics' released by the Bank of Korea on the 22nd, the currency composition of export payment amounts last year was ▲US dollar 83.6% ▲euro 6.2% ▲Japanese yen 2.9% ▲Korean won 2.5% ▲Chinese yuan 2.0%.

Compared to 2019, the shares of the US dollar and euro each increased by 0.1 percentage points, and the yuan share also grew by 0.2 percentage points.

This is due to an overall increase in exports of semiconductors (98.4%) and information and communication devices (90.1%), which have high dollar payment rates, as well as an increase in exports of chemical industry and information and communication products to the European Union (EU) with payments received in euros. However, the share of export payments in Korean won decreased by 0.1 percentage points.

Park Changhyun, head of the International Balance of Payments Team at the Bank of Korea's Economic Statistics Bureau, explained the reduction in the won share by saying, "Since the enforcement of sanctions on Iran in 2018, won-denominated export payments to the Middle East have continuously declined, and won-denominated exports of passenger cars to the EU also decreased by 14.2%."

The currency composition of import payment amounts was ▲US dollar 78.1% ▲euro 6.5% ▲Japanese yen 5.9% ▲Korean won 7.0% ▲Chinese yuan 1.5%. The won share increased by 1.1 percentage points from 5.9% in 2019, setting a record high.

The euro share also rose by 0.6 percentage points from 5.9% to 6.5%, driven by increased euro-denominated import payments for EU-made machinery and precision instruments such as semiconductor equipment. Conversely, the dollar share fell by 2.5 percentage points from 80.6% to 78.1% over the year. This decline reflects a decrease in import payments for crude oil, gas, and other products with high dollar payment rates, due to falling oil prices.